Fair Work Act 2009

ss.400A, 611 - Application for costs

The trustee for the Delmont Hospital Unit Trust

Application for costs under ss 400A and 611 - extent to which legal assistance was reasonably required to defend a weak claim - factors relevant to discretion - costs awarded

• [1] The trustee for the Delmont Hospital Unit Trust (Delmont) has made a costs application against Barbara Wielechowska under ss 400A and 611 of the Fair Work Act 2009 (Act) in respect of legal fees that it incurred in defending an unfair dismissal application brought against it by Ms Wielechowska in matter U2024/9644. On 28 November 2024, I upheld Delmont's jurisdictional objection that it had not dismissed Ms Wielechowska ( [2024] FWC 3301). I found that Delmont had made clear to Ms Wielechowska that it required her to complete her mandatory training before it would roster her for work, that she did not complete her training, that she was therefore not rostered to work, but that she was not dismissed. I found that Ms Wielechowska was not an impressive witness and that it was not credible for her to suggest that she saw none of the many emails that the hospital sent her, or the documents that it posted to her, pertaining to the requirement that she complete the training. I found that Ms Wielechowska unreasonably refused to engage with the hospital about this matter. I concluded that, although Ms Wielechowska's conduct had given Delmont every right to dismiss her, it did not do so. I found that Delmont did not take any step to end Ms Wielechowska's employment. The unfair dismissal application was therefore dismissed.

• [2] The general rule is that parties bear their own costs in relation to a matter before the Commission (s 611(1)). However, s 611(2) provides that the Commission may order a person to bear some or all of the costs of another person in relation to an application if the Commission is satisfied either that the first person made the application 'vexatiously or without reasonable cause' (s 611(2)(a)), or that 'it should have been reasonably apparent' to the person that the application had 'no reasonable prospect of success' (s 611(2)(b)). Further, s 400A provides that in relation to an unfair dismissal application the Commission may make a costs order against a party if it is satisfied that it 'caused' the other party to incur costs 'because of an unreasonable act or omission' in connection with the conduct or continuation of the matter. Delmont's costs application contends that each of ss 611(2)(a), 611(2)(b) and 400A is engaged and that the Commission should exercise its discretion to order Ms Wielechowska to pay $13,936 in legal costs reflected in tax invoices which Delmont has reconciled with the scale of costs in schedule 3.1 of the Fair Work Regulations 2009. The costs comprise $6808 in solicitors' fees and $7128 in counsel's fees. They relate to advice, the preparation of submissions and witness statements, briefing and conferring with counsel, and other attendances on Delmont in respect of the conduct of its defence of Ms Wielechowska's unfair dismissal application.

• [3] Delmont contends that this is a clear case where costs should be ordered because Ms Wielechowska was found to have acted unreasonably, and as a result of her conduct the hospital incurred legal costs in defending the application. It submits that on the facts known to Ms Wielechowska when she made the application, she should have understood that her application had no substantial prospect of success: she had been told orally and in writing by Delmont that she could not work until she had completed her mandatory training, and that she had not been dismissed but was on unpaid leave. Delmont contends that the application was manifestly groundless and so obviously untenable that it could not possibly succeed. It submitted that Ms Wielechowska acted unreasonably by commencing the application and by continuing it even after a letter was sent to her by Delmont's solicitors confirming that she was still employed and offering to forego any claim for costs if she withdrew the application before the start of the proceeding. Delmont contended that Ms Wielechowska should be ordered to pay its claimed costs in the proceeding, or some of its costs.

• [4] Ms Wielechowska did not attend the costs hearing. Despite numerous attempts, she could not be contacted on telephone numbers that she had provided to the Commission. She has not offered any explanation for her failure to attend the costs proceeding. The notice of listing advised the parties that they were required to attend and that s 600 of the Act allows the Commission to determine an application in the absence of a person who has been required to attend before it. It is appropriate that I now determine the costs application.

• [5] I do not consider that Ms Wielechowska made her application vexatiously. However, I agree with Delmont that she made the application without reasonable cause, and that it should have been reasonably apparent to her that it had no reasonable prospect of success. Although Delmont had threatened to take disciplinary action if Ms Wielechowska did not complete the training, it did not in fact do so. It took no step at all to terminate her employment. Delmont explained to her that it was not rostering her to work because she had not completed the training. Ms Wielechowska unreasonably refused to engage with the hospital about the matter. In these circumstances, there was no basis for her to claim that she had been dismissed. This must have been clear to her. The discretion to award costs under ss 611(2)(a) and (b) has been enlivened. But should I exercise it? And if so, how?

• [6] I agree with Delmont that Ms Wielechowska's application was a very weak one. But just as this must have been apparent to Ms Wielechowska, so too must it have been apparent to Delmont. Why then did it need the assistance of lawyers? Delmont submitted that its human resources officer did not have legal training or experience in running matters in the Commission. But the same was true of Ms Wielechowska, who represented herself from the inception of her claim until the conclusion of the proceeding. Ms Wielechowska was not a formidable opponent. The Commission is a tribunal in which the default position is that parties will represent themselves. The Commission is subject to a statutory direction to perform its functions and exercise its powers in a manner that is quick, informal and avoids unnecessary technicalities (s 577(1)(b)). Further, ample information and material is made available to the public on the Commission's website about proceedings in the Commission, including unfair dismissal matters. At the determinative conference, I refused Delmont's application to be represented before the Commission by a lawyer because I was not satisfied that any of the provisions of s 596 were engaged. It was my assessment that granting permission for legal representation would not enable the matter to be dealt with more efficiently, taking into account the complexity of the matter (or rather the absence of complexity). Nor was it unfair in my view to refuse Delmont permission to be legally represented, either because it could not effectively represent itself or because of considerations of fairness between the parties. Of course, permission to be represented by a lawyer under s 596 is only required in order to be represented in a conference or hearing before the Commission. It is not required in order to obtain legal advice and assistance otherwise in respect of a proceeding in the Commission.

• [7] Delmont contended that it was important for it to have legal representation because of the serious implications of the application for the hospital, including the fact that it was possible that the Commission might uphold the claim, in which case Delmont could be exposed to significant costs and reputational damage arising from the publication of the Commission's decision, and that for these reasons Delmont took the claim very seriously. But those are the usual risks at stake in an unfair dismissal proceeding. It is only natural that an unfair dismissal application will be taken seriously by a respondent, for a range of reasons, including those cited by Delmont. Further, I do not accept the notion that in order to take an unfair dismissal application seriously it is necessary to engage lawyers.

• [8] In my opinion, when contemplating the exercise of the Commission's discretion to award costs, it is relevant to consider the extent to which the services that are the subject of the claimed costs were reasonably required in order for the party concerned to advance its case effectively. A simple unmeritorious claim can in principle be given short shrift. In this matter, Ms Wielechowska was a layperson representing herself. The factual compass of her claim was not a wide one, even if it involved a number of interactions with various representatives of the hospital. The legal issues presented by the application were not complex. Nevertheless, Delmont understandably needed legal advice to confirm that this was the case. I also accept that in her submissions in reply, Ms Wielechowska referred to various health sector regulations that would reasonably have required a lawyer's brief review (they were irrelevant). In my view, it is appropriate that the items in the costs schedule that are clearly referrable to Delmont's solicitors' review of the unfair dismissal application, and preparing and filing the F3 response, should be the subject of a costs order. These items amount to $438. The solicitors' attendance on reviewing Ms Wielechowska's further filed materials should be added to this ($116), together with their attendance drafting the costs letter ($24).

• [9] Delmont further contended that its human resources adviser was the only human resources professional for the hospital and had a large remit of responsibility, and that she was new to the role. Although Delmont is not a small employer, I accept the submission that Ms Wielechowska's application presented something of a resourcing challenge for the hospital. I accept that Delmont needed to enlist some external support to prepare the materials that it had been ordered by the Commission to file and serve in preparation for the hearing. In my opinion, the items in the schedule that specifically identify work by Delmont's solicitors interviewing witnesses and drafting statements can reasonably be made the subject of a costs order directed at Ms Wielechowska. These items total $568. When added to the amounts referred to earlier, this produces a sum of $1146.

• [10] Delmont suggested that it would not have been practicable for it to use lawyers on a selective or occasional basis, reverting to its solicitor on multiple occasions for advice or assistance about discrete matters or with discrete tasks, and that it was sensible to have its lawyers run the whole case. I accept that the latter approach was attractive to Delmont. But that does not mean that it was reasonably required. Similarly, the decision to engage counsel no doubt brought various benefits, but in my view specialist advocacy was not reasonably required in order for Delmont to deal effectively with the weak claim that Ms Wielechowska had brought against it.

• [11] It is relevant to take into account the overall conduct of the parties. Ms Wielechowska was unreasonable in the various respects identified in my earlier decision. Delmont on the other hand was reasonable in its dealings with her. It gave her every chance to complete her training and return to the roster. It made clear to her, including in its costs letter, that she had not been dismissed and that she should finish her training and return to work. To properly respond to the claim, Delmont reasonably required a modicum of legal advice and assistance from its solicitors. It chose to engage a greater level of advice and support from its lawyers. I make no criticism of Delmont about this choice, nor do I imply any criticism of Delmont's lawyers. But in my opinion, the costs that Ms Wielechowska should reasonably have to pay are those that are for services that were reasonably required in the circumstances, which are those that I have identified above.

• [12] As to Delmont's application under s 400A, I would note that this section is broader in application than s 611 insofar as it can apply to discrete unreasonable acts or omissions within a proceeding. On the other hand, it is more restrictive than s 611 in its requirement that the costs defendant have 'caused' the relevant costs to be incurred. This makes causation a jurisdictional precondition to the exercise of the discretion to award costs under that section. In my view, the application of s 400A to the facts of this case does not lead to a conclusion that any additional items of costs should be the subject of a costs order. I have considered all of Ms Wielechowska's actions in connection with her conduct of the matter and its continuation, including after the costs letter was sent. The costs that in my view should reasonably be subject to a costs order are those identified above.

• [13] Paradoxically, while a weak case is more likely to engage the Commission's discretion to award costs, it may also mean that the extent to which the other party will reasonably require lawyers to defeat it is limited, and that any costs order that the Commission might make in the exercise of its discretion will be correspondingly confined. A weak case does not ordinarily require the other party to obtain extensive legal advice and support. It may be different where the costs defendant was legally represented; where the conclusion that the case was weak was ascertainable only after complex legal or factual analysis; or where the conduct of the costs defendant imposed excessive time requirements on the costs applicant, such as in cases brought by vexatious or querulant litigants, the management of which might reasonably need to be outsourced to lawyers. But none of this was the case here. Ms Wielechowska brought a very unmeritorious case against Delmont. It is fair and reasonable that she should pay for some of Delmont's costs, but only to the extent that I have identified above.

• [14] Pursuant to s 611(2), I will order that Ms Wielechowska pay to Delmont its costs in relation to her unfair dismissal application in the amount of $1146. An order is issued separately in PR784514.

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